Najib And 1MDB - Emblematic Of The "Malay Problem"

 Najib And 1MDB – Emblematic Of The “Malay Problem”

M. Bakri Musa

 

The humongous One Malaysia Berhad (1MDB) mess is emblematic of a much greater and complex “Malay Problem.” That is, the ignorance and willful detachment of Malay leaders to the pressing monumental challenges facing our community.

 

To wit, the two major Malay political parties, United Malay National Organization (UMNO) and the Islamic Party PAS, planned a major rally this Monday January 6, 2025 to support former Prime Minister Najib Razak, the central crook in the 1MDB scandal now jailed. Pardoning Najib will not contribute in any way towards solving the Malay problem. On the contrary he is very much part of the problem, thus cannot be part of the solution. 

 

Last Friday January 3, days before the rally, UMNO abruptly withdrew its participation ostensibly in deference to an earlier royal decree. It would also have been awkward had UMNO taken part as it is part of the government. Unstated but clear and loud as the call for Azzan is that the present Agung will not be beholden to what his immediate predecessor might have decided (or not) with respect to Najib’s pardon. UMNO readily cowed to that presumed palace disapproval of the rally.

 

The previous Agung had a soft spot for Najib; not so the current one. The present one had in no uncertain terms declared on day one his abhorrence for corrupt leaders. Long close to the crisp, honest and competent ministers across the causeway, Sultan Ibrahim has minimal tolerance to their corrupt sluggish Malaysian variety.

 

Come Monday we will see how far UMNO members can escape their feudal mindset to exercise their rights to a peaceful assembly. PAS meanwhile issued a statement to continue with the rally, thus in effect defying the palace. Kudos to them if they do indeed proceed. The right to a peaceful assembly far outranked the presumed defying of a royal decree.

 

This much is clear. Najib has once again demonstrated that he is a divisive figure. As veteran journalist Kadir Jasin noted, Najib was convicted not for stealing naan at the local Indian bakery. 

 

A major turnout this Monday would portend more and even greater future 1MDBs should these leaders regain power. On the positive side, that would also signal that Malays (especially those in UMNO) have escaped our feudal mentality and assert their rights to a peaceful assembly.

 

Last December 12, 2024 there was the pathetic sight of former Prime Ministers Mahathir and Muhyiddin Yassin announcing with great fanfare the formation of a “Meja Bulat Melayu Terancam” (Roundtable To Tackle the Precarious State of Malays). Mahathir and Muhyiddin are no fans of Najib; their parties also have an overwhelmingly Malay membership. 

 

Nearly a month later, nothing more was heard. Meja Bulat leaders’ rhetoric betray their true core:  theirs is more pendatang (immigrant) paranoia, less problem solving. An apt kampung expression best describes such passion:  Hangat hangat taik ayam (the warmth of chicken droppings). 

 

            It is difficult to comprehend the magnitude of 1MDB’s losses as its myriad subsidiaries had taken many loans, all guaranteed by the parent company. Besides, the ringgit and dollar of 2012 (when the bonds were issued) were much stronger, sans the ravages of inflation and foreign exchange rate gyrations since then.

 

            Far more consequential, and again unquantifiable, were the associated lost opportunities. Had the billions squandered been spent modernizing classrooms, libraries, and laboratories of our schools as well as recruiting quality teachers, there would be little need today for that Meja Bulat.

 

1MDB was the giant government-linked corporation (GLC) that morphed in 2009 from the old sleepy Terengganu Investment Authority (TIA) soon after Najib became Prime Minister. TIA was a local Norwegian Sovereign Fund wannabe, a trust fund to manage that state’s hydrocarbon windfall. While the Norwegians today could live comfortably (if they choose to) just from the returns of their Sovereign Fund, Malaysia still bears the horrendous burden of 1MDB, and not just in monetary terms. 1MDB has polarized Malays and Malaysians. The courts are still plugged with the related criminal cases. As for those bonds, the last payment would not be till 2043.

 

I first heard of 1MDB back in 2012 when I saw a full page “tombstone” advertisement of its bonds in The Wall Street Journal. What drew my attention was the then unbelievable usurious near six percent interest rate.

 

At the time I had just refinanced my house. My rate was under three percent, with the associated costs a mere few hundred dollars, less than half a percent of the value of the loan. By contrast, Goldman Sachs, the bonds’ underwriter, collected a cool US$650 million in fees for the total face value of US$3.5 billion bonds, a whopping nearly 20 percent. No wonder Goldman Sachs executives awarded themselves obscene bonuses!

 

At the time a top Bank Negara official was vacationing in California and visited me. Showing the advertisement, I teased him that my creditworthiness was far superior to Malaysia’s. His reaction stunned me. He knew nothing of the bond offerings! I would have thought that such a major transaction would have been a hot topic in the Bank’s boardrooms and around the water coolers.

 

Bank Negara is not your typical Third World institution. Its first head was a Queen’s Scholar and Cambridge graduate, Ismail Ali, legendary for his brilliance, competence, and most of all, integrity. The Bank’s head during the entire 1MDB saga was one Zeta Aziz, an Ivy League PhD in economics and daughter of the famed economist Ungku Aziz. 

 

Nor was the 1MDB debacle unique. Much earlier were the London Tin and Forex scandals, among others. Then-Prime Minister Mahathir thought he was smarter than George Soros and the other London futures traders. Mahathir forgot that while they used spare funds from rich investors and thus could afford possible losses, he gambled with precious public funds meant for rural schools and clinics in his Ulu Kedah.

 

There is yet another bigoted, sinister and inflammatory underlying theme to the current 1MDB narrative. It is hidden or purposely not referred to. That is, an honest trusting Malay leader (Najib) had been hoodwinked by a conniving local Chinaman (Jho Low) and a smart foreigner (Tim Leissner). Never mind that Najib’s own stepson Reza Aziz was very much in the muck of things.

 

Leissner was particularly reprehensible in Malay eyes. He briefly converted to Islam purportedly to gain the favor of a well-connected Malay beau who happened to be the chief executive of a major media company. Being a Muslim, whether born, instant, or put-on, opens many doors in Malaysia. Leissner was key for Goldman Sachs getting 1MDB’s underwriting.

 

This lady was even smarter. She did a ‘Leissner’ on him and received a mansion in London for their brief affair as well as not exposing the great fraud that he was. 

 

It is this destructive racist theme in the current 1MDB narrative that is holding sway among many Malays. It is this that makes 1MDB so dangerous. Alas, this sinister strand is missed or willfully glossed over by our leaders and masses. That is the crux of the problem, and posing the greatest threat to plural Malaysia.

 

January 4, 2025